Amazon is growing big, and this is evident from the fact that the company is planning a second headquarters in North America. The online retailer is currently soliciting pitches from cities and states for what it calls “Amazon HQ2.”
What does Amazon HQ2 mean?
For Amazon HQ2, the company plans to invest $5 billion in construction and expects it to house about 50,000 high-paying jobs. The company expects HQ2 to serve as a complete headquarters and not a satellite office. The retailer plans to hire new teams and executives for HQ2.
The company will also give existing senior leaders an option to relocate their teams to the new building. Further, even employees working in HQ1 currently will be given an opportunity to move to HQ2, notes USA Today. According to CEO Jeff Bezos, the new headquarters will be a “full equal” to their Seattle headquarters.
“Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs. We’re excited to find a second home,” the CEO said.
Amazon’s announcement about HQ2 comes at an interesting time. Apple is almost done with its new spaceship headquarters, and next week, the company is even hosting an event in its new Steve Jobs Theater, where it will likely showcase its much-anticipated tenth anniversary iPhone.
“Architecture has long been used as a symbol of might and power,” says TechCrunch.
Thus, by announcing a new headquarters, Amazon could be making a statement that Apple is not the only tech company to give attention to. Amazon is also expanding outside the U.S. and recently opened a new HQ in London.
How Amazon plans to finalize the location
To choose the city that will host the HQ2, Amazon says there will be a few “decision drivers,” like incentive programs such as workforce grants, fee reductions, tax credits/exemptions, relocation grants and utility incentives.
“The initial cost and ongoing cost of doing business are critical decision drivers,” the company says.
Further, the company said that it will give priority to bids from metropolitan areas with over 1 million residents and regions that assure a “stable and business-friendly environment.”
Based on Amazon’s estimates, its investment in Seattle from 2010 through 2016 has contributed an additional $38 billion to the city’s economy. For every dollar that Amazon invested, the city generated $1.40. Amazon’s Seattle operations currently employ 40,000 people, cover 8.1 million square feet with 33 buildings, and include 24 restaurants.
As a first step, the retailer is opening the Request for Proposal (“RFP”) stage, in which it is asking the interested local and state governments to contact it. For more information on what Amazon expects, the cities and states are asked to visit www.amazon.com/amazonHQ2.
Asking cities to submit proposals is becoming a common trend nowadays. For its so-called Gigafactory, Tesla asked local governments for millions of dollars in incentives. Recently, Apple supplier Foxconn agreed to open a production factory in Wisconsin after authorities assured them $3 billion in tax breaks over 15 years, notes The Verge.
In pre-market trading today, Amazon shares were in the green. Year to date, the stock is up more than 29%, while in the last year, it is up more than 25%.